1

Accounting refreshers for cash flow management

• Presentation and reading of the balance sheet: a snapshot of the assets of the company at a given point in time.
• The various items on the assets side of the balance sheet: fixed assets, receivables, amortizations, inventories, etc.
• The various items on the liabilities side of the balance sheet: equity capital, provisions, borrowings, debts, etc.
• The profit and loss account: the measurement of the economic activity of a company over a financial year.
• The components of the profit and loss account: revenues and operating, financial and exceptional costs.
• The notes to the financial statements: the explanations for variations from one financial year to the next.

2

Identifying the sources of information for the cash flow forecast

• Understanding the operating cycle.
• Understanding the laws of cash receipts and payments.
• Developing investment and financing budgets in the medium and long term.
• Understanding the concept of normative Working Capital Requirement (WCR).

3

Assessing the cash position of the company

• Carrying out a static analysis based on the balance sheet: the rule of financial balances.
• Analyzing the operating balances: determining the Working Capital Requirement (WCR).
• Using cash flow statements.
• Analyzing the situation from the profit and loss account: understanding and respecting the rule of optimization of margi
• Determining the company’s capacity for self-financing.
• Understanding the various traditional reasons why the annual cash flow forecast can be unreliable.

4

Drawing up a budget and a cash flow plan

• Constructing the budget: the terminology and the concept of budget management.
• Understanding the importance of cash flow modeling.
• Drawing up a cash flow plan.
• Making the necessary adjustments on the basic accounting data.
• Developing and articulating the various budgets: sales, production, procurement, general services, etc.
• Implementing a budget check: (variations in costs and sales).
• Putting corrective actions in place.

5

Understanding and implementing a system of “customer solvency” monitoring

• Understanding the importance of setting up a customer monitoring system.
• Analyzing the solvency and profitability of customers: structural, liquidity, management and business activity ratios, e
• Securing the processing of your receivables into cash.
• Spotting the warning signs before a customer default.
• Understanding the legislation designed to prevent companies getting into difficulties (the seven stages of the law of 26
• Focus: reminder of the Law of Modernization of the Economy (LME) of 04/08/2008 on the new decrease in customer credit.

6

Implementing elements to improve the Working Capital Requirement.

• Defining the financial balance of the company (WCR / Overall Net Working Capital (ONWC) / net cash).
• Understanding the actions to be implemented to improve the cash flow.
• Understanding the actions to be implemented to improve the company’s margins.
• Optimizing your Working Capital Requirement: Cash culture
• Optimizing average settlement timescales.